PROPLASTICS Limited recorded a sharp improvement in financial performance during the first half of the year, with profit before tax rising 50% as turnover and sales volumes increased despite global supply chain disruptions and rising input costs.
In its unaudited condensed consolidated interim financial results for the six months ended June 30, the plastics manufacturer said turnover increased 22% to US$11,7 million, driven by a 23% increase in sales volumes.
Profit before tax rose to US$0,9 million, while profit after tax increased to US$0,6 million, representing growth of 50% and 79%, respectively.
The company attributed the performance to “disciplined execution and resilient demand across all market segments”.
Gross profit increased 19% to US$3,9 million, while overhead control improved, with overheads accounting for 25% of turnover compared with 27% during the same period last year.
The company also benefited from a substantial reduction in finance costs, which fell 56% after the group significantly reduced its borrowings.
The improved performance came despite continued pressure from global geopolitical tensions and disruptions to supply chains.
Proplastics said heightened tensions in the Middle East had contributed to pressure on supply chains and input costs, particularly through disruption to PVC resin supplies and volatility in fuel and raw material prices.
“While these factors are beyond our control, we have activated alternative sourcing and procurement levers to safeguard margins and supply continuity,” the company said.
The group remained heavily exposed to the United States dollar, earning 97% of its revenue in US dollars during the period, while the remaining 3% was earned in Zimbabwe Gold.
The company said the local operating environment remained stable and supportive of trade, although the market was largely dollarised because of persistent local currency scarcity.
Exports contributed US$0,6 million to turnover, accounting for 5% of revenue and representing a 141% increase from the first half of 2025.
The improved profitability also translated into stronger cash generation.
Proplastics generated US$1,6 million in cash from operations, up 29% year on year, which management attributed to improved profitability and working capital management.
The company invested US$343 000 in capital expenditure during the period, while the full-year capital expenditure budget stands at US$2,4 million. The expenditure is expected to be financed through internal resources and existing facilities.
The group closed the period with US$545 000 in cash and cash equivalents, while total assets increased to US$26,6 million. The current ratio stood at 1,8.
Looking ahead, Proplastics expects demand for its products to strengthen during the second half of the year, traditionally its peak trading period.
The company said the anticipated El Niño-induced drought could increase demand for its products as government and other stakeholders invest in water-security projects for crop irrigation and human and livestock consumption.
Infrastructure development across sectors is also expected to accelerate in the second half.
“Given the projected strong demand for the group’s products, the expanded production capacity, underpinned by investment in new equipment, the group is in a sound position to capitalise on opportunities in the second half of 2026,” chairman Gregory Sebborn said.
The board, however, proposed that no interim dividend be declared, citing the need to continue expanding production capacity.
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